Jeb Bush Wants 4 Percent Growth. That Will Be Hard to Reach.

Jeb Bush wants to make the United States an “economic superpower like no other,” as he said in announcing his candidacy for president Monday. There is a good case, of course, that the nation already is an economic superpower like no other: It has the highest gross domestic product in the world by a margin of about $7 trillion.

In Mr. Bush’s telling, that isn’t good enough. “There’s not a reason in the world we can’t grow at 4 percent a year,” he said, “and that will be my goal as president.”

He’s certainly right that economic growth has been disappointing during the Obama years, even if you exclude the recession that was underway when President Obama took office. From 2010 to 2014, the economy grew an average of 2.2 percent a year, which has translated into a halting, slow recovery for the millions of Americans who were left unemployed by the Great Recession.

Image

Cargo at the Port of Los Angeles. Imports were held down by a labor dispute earlier this year, but have since rebounded sharply in another measure of economic recovery.CreditBob Riha Jr/Reuters

But simple math suggests the next president is unlikely to see sustained 4 percent G.D.P. growth absent a remarkable, rapid upward shift in the nation’s productive capacity.

In the early years of the Obama presidency, there was a huge “output gap” between the nation’s economic potential and its reality — $1.1 trillion in the spring of 2009, based on the Congressional Budget Office’s estimate of potential G.D.P.

That was the gap between the level of economic activity the C.B.O. thought would be plausible if there had been full employment and businesses operating at full capacity, as compared with the actual economic reality of that time.

Back then, 4 percent growth would have been plausible, and if it had happened it would have been a nice, brisk recovery, not unlike the roaring recovery that followed the deep early-1980s recession. (Whether the sluggishness is the fault of the Obama administration, a result of the difficulty of healing from a post-financial crisis recession, or some other factor is a worthwhile argument, but is a separate discussion from what economic growth will look like under the next president.)

While there was a huge output gap back in 2009, the growth in excess of 2 percent per year recorded in the six years since then, while disappointing, has been closing it. In the first quarter, the output gap was down to $426 billion, or about 2.6 percent of potential G.D.P.

If the economy continues growing at the 2.2 percent annual rate of the last several years between now and inauguration day in January 2017, the next president will take office with no output gap at all. In fact, under that math the economy would be functioning a bit above potential in the first quarter of 2017, $7 billion worth.

In other words, if there is 4 percent G.D.P. growth under the next president, it is likely to take place against a backdrop of an economy already operating somewhere near full employment and full capacity. You already see that in the job market. The unemployment rate was 5.5 percent in May, with 280,000 jobs added. If job creation continues near that level, the unemployment rate will most likely be comfortably below 5 percent come January 2017, because that is getting into the range of what economists at the Federal Reserve and the private sector believe to be full employment.

Indeed, if a President Jeb Bush achieved 4 percent growth each year, the G.D.P. at the end of his first term would be nearly $1.1 trillion higher than the C.B.O. believes to be the nation’s potential economic output at the start of 2021. That would be nearly as big an economic outperformance as the depths of the Great Recession were an underperformance.

The C.B.O. numbers around potential output are mere best-effort estimates, of course, and they may be underestimating growth potential. Productivity growth has been lousy in recent years, and if that trend reverses, it will mean higher potential growth. An improving job market might coax workers into the labor force who currently aren’t looking for jobs, which would also increase the nation’s economic potential.

But for 4 percent growth to be realistic in the next presidential term — not just for a one-quarter spurt but on a sustained basis — one of two things must apply. Either the technocrats at places like the C.B.O. and the Fed must be wildly underestimating the nation’s growth potential today. Or a revolution in American productivity must be on the way. Neither of those are things that a president has much control over.